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Payment of ZUS/ Income Tax - 'sole trading' business in Poland


local_fela 17 | 172
11 Feb 2014 #1
Do you know if I open a 'sole trading' business here in Poland, do I need to pay 'Zus' twice. What I mean by twice is that I am currently working full time for a company in Poland.

So I was wondering if ever I will need to pay Zus twice and I heard that might be health insurance I will have to pay twice as well? Is that true?
InWroclaw 89 | 1,910
11 Feb 2014 #2
Not as far as I know. You'll pay something at your employer's (or they pay it for you) and then you pay a top-up to ZUS in addition.

From what I gather, if for example 300PLN ZUS is paid via your employer, then an extra 131PLN to ZUS for the first 24 months, or something like that. Then 1100PLN a month or less perhaps, depending on their current rates and other factors maybe.

Uwaga! This is amateur advice. For confirmation, speak to a proper accountant, because I am just an ordinary blokey with no qualifications in this at all.
OP local_fela 17 | 172
14 Feb 2014 #3
This is really complicated mate! thanks for you support. wish someone on PF knew something about it.
InWroclaw 89 | 1,910
14 Feb 2014 #4
V welcome. I did try to get you more info but the accountant wouldn't give me more than a few moments when I asked. She rushed me away.
O WELL 1 | 156
21 Mar 2018 #5
[moved from]

@Dirk,most people here are not in business and cant even imagine what a business person thinks like.My inlaws are working class and are so dependent on pension,whereas mostly a business person dont even care about the peanut pension they will have to live of.Some people make enough money a month then 3 Sexpats income combined a year and in Poland(I personally know maybe 5),they can never imagine that.Remember when there was advice given here by some posters to report the landlords for tax evasion?thinking everyone is evading 8.5% tax.So for some it can be boasting.

you don't pay ZUS?

I dont mean to step on your toes in any way,but couldnt resist to tell you that lots of people in Poland make over 7 figure Zs and still dont pay a dime in ZUS,and why should they if they are not required to.
Dirk diggler 10 | 4,580
21 Mar 2018 #6
Im not even counting on social security to exist if i live past 65 lol. With all the lazy people put of the labor force its unsustainable

Yeah absolutely. My aunt bought a bunch of limos and started a limo business bc it was a better option that paying taxes. If you reinvest more than your tac liability in pl you dont owe a grosz.

Normal people think damn I have to pay taxes and dont even fight it
Business people think what loopholes can be exploited to pay as little as possible or none at all
I write off depreciation on my house every year and that alone covers most of the property tax

She made her millions importing cheap crap from China and selling it slightly below market namely tombstones and caskets. Like I said a business doesnt have to be sexy to be a cash cow, in fact most arent. I copied her idea but chose to do sporting goods that I buy from stores going out of business or discounted goods (you wouldnt believe what a polish golfer will pay for a $20 used 'custom' club rofl) and with gold from Craigslist ads and a few contacts that can get me a few oz quickly - cash for gold and diamonds all day long. Poland is still stuck on that 9k bs and even gp on top of 925 yet they price it like 14k in us. If you send 14k the price is almost double in pl than us. Some polish people even resell it in germany where its even pricier. Once i have some free time im gonna travel to india and sri lanka to find a new source once i break a quarter pound half pound per shipment. If it wasnt for goddamn vat profits would be over 30% higher. I miss the pre eu days when you could send whatever you want and no one hassled you about paying taxes or even less inspecting the contents. You could send a crate full of air bags and no one would bother to think they were all boosted or even a whole car with no papers.

I find it funny though how everything in a person's life is made in China from the baby bottle amd toys they use as an infant to their casket and tombstone at the end. And it's the same whether your in us or pola.d
cms neuf 1 | 1,758
21 Mar 2018 #7
Dirk you have a bit of a
weird understanding of tax in Poland and as you seem to have a serious business going then get your accountant to sign off your not paying ZUS. I have farmland myself which is actively farmed and profitable but it doesnt het the rest of my interests ZUS free. Ditto the point about reinvestment - it can reduce incone tax under certain difficult to meet conditions but it wont get you off capital gains taces.
Dirk diggler 10 | 4,580
21 Mar 2018 #8
@cms neuf
Again, all my exemptions are legal and since I do not use the ZUS system, I do not have to pay into it since I pay into a different superior system, do not use the system, and none of my employees (me being the only employee) use ZUS. If you are a sole proprietor living abroad of a business registered in Poland and where you don't use the ZUS system and have no employees and don't plan on ever using it you can get exemptions.

capital gains taces.

Capital gains are entirely different from corporate profits. Capital gains taxes are when you sell an item for more than you bought it. In Poland the capital gains tax is 19% and is from sales of shares, stocks, income from capital funds, etc. NOT from corporate profits/loss from operations.
TheOther 6 | 3,664
21 Mar 2018 #9
like what? besides family?

The obvious. Reliable friends. A stable relationship. Being able to look back and not regretting a thing you've done. Staying healthy. Plus a million other things that money can't buy. The Germans have a saying which pretty much sums it up: "Your last (final) shirt has no pockets". Meaning, that you can't take your riches with you when you kick the bucket. Life is short, don't waste it.
Dirk diggler 10 | 4,580
21 Mar 2018 #10
Being able to look back and not regretting a thing you've done

I don't think there's a single person on earth that doesn't regret at least one thing.

Staying healthy

I highly doubt Magic Johnson would live into his 60's and 70's with HIV if he were poor, much less be able to have several kids without infecting them or his wife. Money may not buy you good genes (yet) but it certainly helps to keep a person healthy. Notice even now that wealthy people tend to be far healthier and skinnier than poor people in developed countries. Why? Because they can afford vegetables, fruits, and other foods which are expensive. Poor people tend to eat fast food because they can't afford to spend more than a few dollars on a meal. Not to mention treatments that aren't covered by insurance like blood transfusions and vitamin/mineral IV drips. Whenever I have a hangover or even just feel sluggish I hook myself up to a vitamin drip and its gone after a few minutes. If you have the money you can even pay to ensure your baby has a higher chance coming out way you want it to - male, tall, blue eyed, low risk of diabetes, cancer, etc. Prices start at around $10k and of course aren't covered by insurance. Wealthy people have totally different access to medicines and other things than the average person. Take even Hep C. The drugs to cure hep c cost $1k a day. Not many people can afford that.
TheOther 6 | 3,664
21 Mar 2018 #11
I don't think there's a single person on earth that doesn't regret at least one thing.

I wasn't talking about things like bad financial decisions and such, but about the more substantial ones like moving to another country, marrying someone or choosing a particular career path.

insurance

You're looking at it from an American perspective. Most other western countries have systems in place where people don't have to worry about health insurance or money once they retire.

Whenever I have a hangover or even just feel sluggish I hook myself up to an IV drip and its gone after a few minutes.

There's a much better "cure": when you have a hangover, just down a few more drinks. Headache gone. :)
O WELL 1 | 156
21 Mar 2018 #12
Yup,I agree.I want to have as much money as I can make legally,but dont want to be the richest man in the cemetary.Money is never enough anyway and there is no end spending it.I always wondered what is rich with what net worth?I think poverty in developed countries is usually created by lazy people or people with no common sense to survive.

Dirk you are very right about poor people eating more junk food and thus are more overweight.Last cpl of months I joined a Hi Fi gym around me and most people in that place are in shape then the other gyms Ive been going to.

lol and when I have a hangover i spend 10 minutes more in the sauna.I didnt know hep c can cost so much.
Dirk diggler 10 | 4,580
21 Mar 2018 #13
Most other western countries have systems in place where people don't have to worry about health insurance

Are you kidding me rofl? The British, Canadian and Polish system all have extremely long wait times to see specialists. If you have some disease that requires a specialist or need some surgery where there's only a few surgeons trained in it you'll wait months and months if not years before you're seen.

I think poverty in developed countries is usually created by lazy people or people with no common sense to survive.

Of course. It was the same in PRL. The people who didn't care to hustle or didn't have any entrepreneurial skills had the basics with food and shelter, but that's it. And many people were fine with that. However the people who weren't content with just the basics and wanted things like more meat for their families for dinner or a pair of levi's jeans or a new maluch went out and made it happen whether it was changing currencies, importing jeans and VHS tapes, trading meat and gold for money, whatever. It's the same thing now. A person can either live their whole live around the median income and bsaically live paycheck to paycheck, have no capital working for them, and be 1 minor issue away from losing their home. Or, they could work hard for a few years, live below their means for a while, invest the difference, keep reinvesting dividend payments and profits, and before long they'll make more money investing than they would at a 9-5. If you invest enough in a startup you could basically buy your way to becoming an executive and then you have even more control over share prices

I didnt know hep c can cost so much.

Yeah in the US there's like 3 drugs all costing between $60k-$100k for the treatment which is usually 3-6 months. In India though you can get the entire treatment for $1k.

If I had the money to buy the patent for one of these drugs i could retire happily ever after before the 7 yr patent expires. After I sell my stake in this startup I'm running now that's going to be my next venture - form a group of investors to buy a drug that treats some super rare disease and jack up the price a few thousand percent.
kaprys 3 | 2,242
21 Mar 2018 #14
@O WELL
If someone makes money here and doesn't pay ZUS, that's a fraud. And cheating the system. They don't contribute to the budget and that's not patriotic . The tax money goes to the health system etc. If you avoid it to get more profit, you're a fraud and far from being patriotic.

Honestly, I don't understand why you seem to take pride in knowing such people. How is the situation in Poland going to be any better with such people around?

@Dirk diggler
So you're in KRUS?
I may have exaggerated saying Poles living abroad don't love their country. There are different reasons why they moved. But it's totally weird that someone who claims to love their country lists a number of excuses why they won't move. The percentage of Muslims and Jews you often criticise is much higher in the US. You say you're well of so you have enough money even if things don't go well. I'm not going to check your name online. I can't be 100% sure it's you ... also I think it's rather creepy to check a user's personal details. Not to mention calling them, if what Doug says is true.

Seriously, contribute here. Pay taxes.
And practice your Polish. Read in Polish. Talk to people in Polish. Right now it's clear your Polish requires a lot of practice both in terms of spelling and grammar. Perhaps, that's the reason you don't want to move.

These two little things will show your patriotism and love of Poland. They're not that little really.
kaprys 3 | 2,242
21 Mar 2018 #15
What system is superior to ZUS?
What's the law that allows you not to pay into ZUS if you live abroad but have the business registered here?
O WELL 1 | 156
21 Mar 2018 #16
If someone makes money here and doesn't pay ZUS, that's a fraud. And cheating the system

I do legally too,for the last maybe 18 years in Poland.Never paid a dime in ZUS.And why should I have to when I can get away with it LEGALLY?That is certainly not cheating the system,its the taxation law.

Just to update you its called "REACHOUT".I pay 8.5% tax only and from this year it goes to 12,5% on any income over 600k Pln a yr.No deductions allowed ofcourse,but I dont have any:)
kaprys 3 | 2,242
21 Mar 2018 #17
So how do you get away with it legally?
I doubt it's called reachout in Polish.
Seriously guys, what's the law behind it?
O WELL 1 | 156
21 Mar 2018 #18
You can check it online.It is called reachout in polish accent as well.Sorry I dont speak fluent Polish but you can look it up yourself.

Oh to clarify,I think its only applicable to property rentals,but dont quote me on that.
kaprys 3 | 2,242
21 Mar 2018 #19
I have tried to check it online and found no results.

edit: unless you're talking about renting a flat as a private person. (I guess you meant ryczałt)
That's not a registered business. If you register a business, you need to pay ZUS even if you don't use it afaik. That's why you got me curious.
O WELL 1 | 156
21 Mar 2018 #20
My google translate says:podatek dochodowy
When I meet my accountant next month I will ask her.Lots of people here know that,I think Polish investor,Dolno,cuz they mentioned that also once here.

Not flats but only commercial properties and yes they are on our personal names.
yes you are right thats the one.
kaprys 3 | 2,242
21 Mar 2018 #21
Podatek dochodowy is income tax.
Dirk diggler 10 | 4,580
21 Mar 2018 #22
What system is superior to ZUS?

Rolniczna ubezpieczalnia i believe it's called KRUS. It's a special insurance/retirement for farmers/owners of agricultural land. I have around a hectar of farm land which I am hording till I'm able to build my dream house on it. It will have a 5-6k sq ft home on it with guest house, 10 foot walls, barbed wire, police dogs roaming the property, 2 rings of security, armed guards, swimming pools, tennis court, and random girls frolicking about.

I don't know - I give all the paperwork to my accountants and lawyers. They sign off on it so if anything is screwed up they're liable. The worst thing that will happen to me is I'll pay a fine and some back taxes - which are extremely small in Poland.
kaprys 3 | 2,242
21 Mar 2018 #23
Even if your accountant does the maths, you need to pay it and there are several requirements concerning being insured by in KRUS. Apparently, you are a farmer and since you don't pay into ZUS, you don't make much. And no, KRUS is not superior to ZUS ...
jon357 74 | 22,487
21 Mar 2018 #24
Even if your accountant does the maths, you need to pay it

This is true. And accountants (księgowi are bookkeepers really, not usually accountants) don't always get it right. I have experience of this.

And no, KRUS is not superior to ZUS ...

You are right, it is definitely not superior. ZUS is better. And KRUS are cracking down at the moment on people who pretend to be farmers. This happened to my friend who had been paying KRUS for years on the basis of owning a few hectares that he rented out. One slip on his part and they investigated all his relatives who were doung the same thing too.
cms neuf 1 | 1,758
21 Mar 2018 #25
My strong advice is to get your accountant to sign his name under that specific advice. Im not a tax specialist but im an experienced accountant and as I said in 2013 i was told using krus for non farming activities was no longer possible - its not only the law but the way its interpreted in local zus offices.

Certainly not intending to use the zus in future does not ger you off the hook.

Ryczalt is quite different- - its perfectly legal and a rarity in Polsnd as its a simole user friendly mechanism
delphiandomine 88 | 18,116
21 Mar 2018 #26
in 2013 i was told using krus for non farming activities was no longer possible - its not only the law but the way its interpreted in local zus offices.

It is still possible, but there are very strict interpretations being applied - podatki.egospodarka.pl/138112,W-2017-r-24-000-zl-przychodu-i-ubezpieczenie-w-KRUS-dla-rolnika,1,68,1.html
O WELL 1 | 156
21 Mar 2018 #27
Ryczalt works great for me for almost 2 decades as in my line of work there are no deductions I can claim as all are rented for 777 umowas.Even the liability insurance is paid for by the tenant and I get net net net rent and collect vat and forward to tax dept.Learnt years back that when you buy a new property, paying VAT monthly also gets you your VAT refunded in a month,unlike paying quarterly they will make you wait for 3 months to get your VAT money back ,which is usually a very significant amount.


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